Santander is updating the way it assesses self-employed applications where borrowers have been adversely impacted by the pandemic.

From Monday the lender will disregard accounts for the 2020/21 financial year for residential self-employed applicants whose business has taken a hit because of Covid.

Instead it will use the 2018/19 and 2019/20 accounts.

Brokers will also have to deduct any liabilities relating to Covid support that the applicant may have received from their net profits in their calculations – for example debts from Bounce-back loans or the Coronavirus Business Interruption Loan Scheme.

Santander is asking brokers to call before submitting applications for borrowers who are affected by any of the above criteria so that the lender can explain packaging requirements.

Self-employed borrowers making buy-to-let applications are not impacted by these changes.